Terbium (Tb): The Rarest Critical REE

Terbium is the rarest of the magnet rare earths and faces the tightest supply constraint in the entire REE complex. Global production is only ~600 tonnes/year. Tb is used in ultra-high-purity magnet applications demanding extreme reliability (defense, aerospace). Supply deficit is severe; inventory depletion has occurred. Tb commands extreme price premiums: 3-5x dysprosium price per kilogram.

The Ultimate Scarcity Play

• Global Tb production: ~600 tonnes/year (lowest volume critical REE)
• Processing capacity: China: 85-95% of global separation
• Supply-demand gap: SEVERE and structural through 2030+
• Inventory: Strategic reserves being drawn down; market is in deficit
• Pricing: $1,500-3,000+/kg (3-5x Dy; 30-50x Nd price)

End-Use Applications

• Ultra-high-purity permanent magnets (~90% of demand)
• Defense systems requiring 100% reliability (weapons, satellites, sensors)
• Aerospace applications (military aircraft, missiles)
• Commercial wind turbines in extreme climates
• Advanced EV powertrains (performance vehicles)

Supply-Demand Imbalance

Terbium demand is small but inelastic. Buyers will not accept substitutes or reduced purity. Supply cannot expand quickly without massive capex. Result: structural supply deficit that drives premium pricing.

Investment Implications

• Tb is highest-conviction supply scarcity play in REEs
• New Tb supply projects are rarer than Dy; extremely high valuations justified
• Defense/aerospace demand is policy-protected (unlikely to decline)
• Geopolitical risk is extremely high (China concentration)

Key Takeaways

• Terbium is the ultimate rare earth scarcity story
• Supply deficit is structural and severe
• Extreme price premiums reflect genuine supply constraints
• New Tb capacity = transformational investment opportunity
• Defense demand provides demand floor (won't decline)